<PAGE> 1
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AKAMAI TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-3432319
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
500 TECHNOLOGY SQUARE 02139
(Address of Principal Executive Offices) (Zip Code)
THIRD AMENDED AND RESTATED
1998 STOCK OPTION PLAN
OF INTERVU INC.
(Full Title of the Plan)
ROBERT O. BALL III
VICE PRESIDENT AND GENERAL COUNSEL
AKAMAI TECHNOLOGIES, INC.
500 TECHNOLOGY SQUARE
CAMBRIDGE, MA 02139
(Name and Address of Agent for Service)
(617) 250-3000
(Telephone Number, Including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 1,529,461 $43.07 $65,873,885(2) $17,390.71
value shares (1)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on 2,567,502 shares of INTERVU common stock subject to
outstanding options under the Third Amended and Restated 1998 Stock
Option Plan of INTERVU Inc.
(2) Estimated solely for the purpose of calculating the registration fee,
and based on the weighted average exercise price of the common stock in
accordance with Rule 457(h) under the Securities Act of 1933, as
amended.
<PAGE> 2
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I is included in documents sent or
given to participants in the Registrant's Third Amended and Restated 1998 Stock
Option Plan of INTERVU Inc. pursuant to Rule 428(b)(1) of the Securities Act of
1933, as amended (the "Securities Act").
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Registrant is subject to the informational and reporting
requirements of Sections 13(a), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). The following documents, which are on file with
the Commission, are incorporated in this Registration Statement by reference:
(1) The Registrant's latest annual report filed pursuant
to Section 13(a) or 15(d) of the Exchange Act, or the
latest prospectus filed pursuant to Rule 424(b) under
the Securities Act that contains audited financial
statements for the Registrant's latest fiscal year
for which such statements have been filed.
(2) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal
year covered by the document referred to in (1)
above.
(3) The description of the common stock of the
Registrant, $.01 par value per share (the "Common
Stock"), contained in a registration statement filed
under the Exchange Act, including any amendment or
report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all shares of Common Stock offered
hereby have been sold or which deregisters all shares of Common Stock then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
<PAGE> 3
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Amended and Restated Certificate of Incorporation (the
"Restated Certificate of Incorporation") provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
The Registrant's Restated Certificate of Incorporation provides that a
director or officer of the Registrant (a) shall be indemnified by the Registrant
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement incurred in connection with any litigation or other legal
proceeding (other than an action by or in the right of the Registrant) brought
against him by virtue of his position as a director or officer of the Registrant
if he acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Registrant, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful and (b) shall be indemnified by the Registrant against all expenses
(including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Registrant brought against
him by virtue of his position as a director or officer of the Registrant if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, except that no indemnification
shall be made with respect to any matter as to which such person shall have been
adjudged to be liable to the Registrant, unless and only to the extent that the
Court of Chancery of Delaware determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. Notwithstanding the foregoing, to the extent that a director or
officer has been successful, on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, he is required to be
indemnified by the Registrant against all expenses (including attorneys' fees)
incurred in connection therewith. Expenses shall be advanced to a director or
officer at his request, unless it is determined that he did not act in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Registrant, and, with respect to any criminal action or
proceeding had reasonable cause to believe that his conduct was unlawful,
provided that he undertakes to repay the amount advanced if it is ultimately
determined that he is not entitled to indemnification for such expenses.
As a condition precedent to the right of indemnification, the director
or officer must give the Registrant notice of the action for which indemnity is
sought and the Registrant has the right to participate in such action or assume
the defense thereof.
The Registrant's Restated Certificate of Incorporation further provides
that the indemnification provided therein is not exclusive, and provides that
Registrant may enter into agreements with officers and directors providing for
indemnification rights and procedures different from those set forth in the
Registrant's Restated Certificate of Incorporation.
<PAGE> 4
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
Item 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in the volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering rage may be reflected in
the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and
price represent no more than 20 percent
change in the maximum offering price set
forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement
<PAGE> 5
or any material change to such information
in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
2. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Cambridge, Massachusetts on April 24, 2000.
AKAMAI TECHNOLOGIES, INC.
By: /s/ Robert O. Ball III
------------------------------------
Robert O. Ball III
Vice President, General Counsel and
Secretary
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Akamai Technologies, Inc.
hereby severally constitute and appoint George H. Conrades, Paul Sagan and
Robert O. Ball III, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement on Form S-8 filed
herewith and any and all subsequent amendments to said Registration Statement,
and generally to do all such things in our names and behalf in our capacities as
officers and directors to enable Akamai Technologies, Inc. to comply with all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by said attorneys, or any of
them, to said Registration Statement and any and all amendments thereto.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
Signature Title Date
--------- ----- ----
/s/ George H. Conrades
- ------------------------- Chairman of the Board and Chief April 24, 2000
George H. Conrades Executive Officer (Principal
Executive Officer)
/s/ Timothy Weller
- ------------------------- Chief Financial Officer and April 24, 2000
Timothy Weller Treasurer (Principal Financial
Accounting Officer)
/s/ Arthur H. Bilger
- ------------------------- Director April 24, 2000
Arthur H. Bilger
/s/ Todd A. Dagres
- ------------------------- Director April 24, 2000
Todd A. Dagres
/s/ F. Thomson Leighton
- ------------------------- Director April 24, 2000
F. Thomson Leighton
/s/ Daniel M. Lewin
- ------------------------- Director April 24, 2000
Daniel M. Lewin
/s/ Terrance G. McGuire
- ------------------------- Director April 24, 2000
Terrance G. McGuire
/s/ Edward W. Scott
- ------------------------- Director April 24, 2000
Edward W. Scott
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number Description
- -------- -----------
4.1 (1) Certificate of Incorporation of the Registrant, as amended.
4.2 (1) By-Laws of the Registrant, as amended.
4.3 (1) Specimen Certificate for Common Stock of the Registrant.
4.4 Third Amended and Restated 1998 Stock Option Plan of INTERVU
Inc.
5 Opinion of Hale and Dorr LLP.
23.1 Consent of Hale and Dorr LLP (included in Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney (included in the signature pages of this
Registration Statement).
(1) Incorporated herein by reference from the Registrant's Registration
Statement on Form S-1, as amended (File No. 333-85679).
<PAGE> 1
EXHIBIT 4.4
THIRD AMENDED AND RESTATED 1998 STOCK OPTION PLAN
OF
INTERVU INC.
InterVU Inc., a Delaware corporation (the "Company"), has
adopted The 1998 Stock Option Plan of InterVU Inc. (the "Plan"), effective
February 25, 1998, as amended September 17, 1999, October 21, 1999 and April
5, 2000, for the benefit of its eligible employees, consultants and directors.
The Plan consists of two plans, one for the benefit of key Employees (as such
term is defined below) and consultants and one for the benefit of Independent
Directors (as such term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, key
Employees and consultants to further the growth, development and financial
success of the Company by personally benefiting through the ownership of Company
stock which recognizes such growth, development and financial success.
(2) To enable the Company to obtain and retain the
services of directors, key Employees and consultants considered essential to the
long range success of the Company by offering them an opportunity to own stock
in the Company which will reflect the growth, development and financial success
of the Company.
ARTICLE I.
DEFINITIONS
1.1 General. Wherever the following terms are used in this Plan
they shall have the meanings specified below, unless the context clearly
indicates otherwise.
1.2 Award Limit. "Award Limit" shall mean 100,000 shares of Common
Stock, as adjusted pursuant to Section 8.3.
1.3 Board. "Board" shall mean the Board of Directors of the
Company.
1.4 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.5 Committee. "Committee" shall mean the Compensation Committee
of the Board, or another committee of the Board, appointed as provided in
Section 7.1.
1.6 Common Stock. "Common Stock" shall mean the common stock of
the Company, $.001 par value per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.7 Company. "Company" shall mean InterVU Inc., a Delaware
corporation.
1.8 Corporate Transaction. "Corporate Transaction" shall mean any
of the following stockholder-approved transactions to which the Company is a
party:
(a) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State in which the Company is incorporated, to form a holding
company or to effect a similar reorganization as to form whereupon this Plan and
all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company, in complete liquidation
or dissolution of the Company in a transaction not covered by the exceptions to
clause (a) above; or
(c) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's
<PAGE> 2
outstanding securities are transferred or issued to a person or persons
different from those who held such securities immediately prior to such merger.
1.9 Director. "Director" shall mean a member of the Board.
1.10 Disability. "Disability" shall mean, with respect to any
Optionee, (i) the suffering of any mental or physical illness, disability or
incapacity that shall in all material aspects preclude such Optionee from
performing his or her directorial, employment or consultant duties, or (ii) the
absence of such Optionee from his or her directorial, employment or consultant
duties by reason of any mental or physical illness, disability or incapacity for
a period of six (6) months during any twelve (12) month period; provided,
however, in either case, that such illness, disability or incapacity shall be
reasonably determined to be of a permanent nature by the Committee (or the Board
in the case of Options granted to Independent Directors).
1.11 Employee. "Employee" shall mean any officer or other employee
(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.
1.12 Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.13 Fair Market Value. "Fair Market Value" of a share of Common
Stock as of a given date shall be: (i) the closing sale price of a share of
Common Stock on the principal exchange on which the Common Stock is then
trading, if any, on such date, or, if shares were not traded on such date, then
on the next preceding trading day during which a sale occurred; (ii) if the
Common Stock is not traded on an exchange but is quoted on Nasdaq or a successor
quotation system, (1) the last sales price (if the Common Stock is then quoted
on the Nasdaq National Market or the Nasdaq SmallCap Market) or (2) the mean
between the closing representative bid and asked prices (in all other cases) for
a share of the Common Stock on such date, or, if shares were not traded on such
date, then on the next preceding trading day during which a sale occurred, as
reported by Nasdaq or such successor quotation system; (iii) if the Common Stock
is not publicly traded on an exchange and not quoted on Nasdaq or a successor
quotation system, the mean between the closing bid and asked prices for a share
of Common Stock on such date, or, if shares were not traded on such date, then
on the next preceding trading day during which a sale occurred, as determined in
good faith by the Committee; or (iv) if the Common Stock is not publicly traded,
the fair market value of a share of Common Stock established by the Committee
(or Board in the case of Options granted to Independent Directors) acting in
good faith.
1.14 Incentive Stock Option. "Incentive Stock Option" shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.
1.15 Independent Director. "Independent Director" shall mean a
member of the Board who is not an Employee of the Company.
1.16 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
mean an Option which is not designated as an Incentive Stock Option by the
Committee.
1.17 Option. "Option" shall mean a stock option granted under
Article III of this Plan. An Option granted under this Plan shall, as determined
by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however that Options granted to Independent Directors and
consultants shall be Non-Qualified Stock Options.
1.18 Option Shares. "Option Shares" shall mean shares of Common
Stock acquired by Optionees through the exercise of Options under this Plan.
1.19 Optionee. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.20 Person. "Person" shall mean a corporation, an association, a
partnership, a trust, a limited liability company, an organization, a business
or an individual.
1.21 Plan. "Plan" shall mean The Third Amended and Restated 1998
Stock Option Plan of InterVU Inc.
2
<PAGE> 3
1.22 QDRO. "QDRO" shall mean a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder.
1.23 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
under the Exchange Act, as such Rule may be amended from time to time.
1.24 Securities Act. "Securities Act" shall mean the Securities Act
of 1933, as amended.
1.25 Subsidiary. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one (1) of the other corporations in such chain.
1.26 Termination of Consultancy. "Termination of Consultancy" shall
mean the time when the engagement of an Optionee as a consultant to the Company
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, by resignation, discharge, death, Disability or
retirement; but excluding terminations where there is a simultaneous
commencement of employment with the Company or any Subsidiary. The Committee, in
its absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of limitation,
the question of whether a Termination of Consultancy resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Consultancy. Notwithstanding any other provision of
this Plan, the Company or any Subsidiary has an absolute and unrestricted right
to terminate a consultant's service at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided otherwise in writing.
1.27 Termination of Directorship. "Termination of Directorship"
shall mean the time when an Optionee who is an Independent Director ceases to be
a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death, Disability or
retirement. The Board, in its sole and absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Directorship with
respect to Independent Directors.
1.28 Termination of Employment. "Termination of Employment" shall
mean the time when the employee-employer relationship between an Optionee and
the Company or any Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, Disability or retirement; but excluding (i) terminations where
there is a simultaneous reemployment or continuing employment of an Optionee by
the Company or any Subsidiary, (ii) at the discretion of the Committee,
terminations which result in a temporary severance of the employee-employer
relationship, and (iii) at the discretion of the Committee, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that, unless otherwise
determined by the Committee in its discretion, a leave of absence, change in
status from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate an Employee's employment at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
1.29 Termination for Cause. "Termination for Cause" shall mean the
time when the Independent Director-employer, employee-employer or
consultant-employer relationship between an Optionee and the Company or any
Subsidiary is terminated for cause, as termination for cause is defined in the
Optionee's directorial, employment or consultancy agreement; provided however,
that if termination for cause is not therein defined, it shall have such
meaning, in conformance with applicable law, as the
3
<PAGE> 4
Committee (or the Board in the case of termination for cause of an Independent
Director) shall determine is appropriate.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan.
(a) The shares of stock subject to Options shall be
Common Stock. The aggregate number of such shares which may be issued upon
exercise of such options under the Plan shall be 2,000,000. The shares of Common
Stock of the Company issuable upon exercise of such options may be either
previously authorized but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to
Options granted under the Plan to any individual in any fiscal year of the
Company shall not exceed the Award Limit. To the extent required by Section
162(m) of the Code, shares subject to Options which are canceled continue to be
counted against the Award Limit and if, after grant of an Option, the price of
shares subject to such Option is reduced, the transaction is treated as a
cancellation of the Option and a grant of a new Option and both the Option
deemed to be canceled and the Option deemed to be granted are counted against
the Award Limit.
2.2 Add-back of Options. If any Option to acquire shares of Common
Stock under this Plan expires or is canceled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration, cancellation or exercise may
again be available for the granting of Options hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options which are
adjusted pursuant to Section 8.3 and become exercisable with respect to shares
of stock of another corporation shall be considered cancelled and may again be
available for the granting of Options hereunder, subject to the limitations of
Section 2.1. Shares of Common Stock which are delivered by the Optionee or
withheld by the Company upon the exercise of any Option under this Plan, in
payment of the exercise price thereof, may again be available for the granting
of Options hereunder, subject to the limitations of Section 2.1. Notwithstanding
the provisions of this Section 2.2, no shares of Common Stock may again be
available for the granting of Options if such action would cause an Incentive
Stock Option to fail to qualify as an incentive stock option under Section 422
of the Code.
ARTICLE III.
GRANTING OF OPTIONS
3.1 Eligibility. Any Independent Director, Employee or consultant
selected by the Committee (or the Board in the case of Options granted to
Independent Directors) pursuant to Section 3.4(a)(i) shall be eligible to be
granted an Option.
3.2 Disqualification for Stock Ownership. No person may be granted
an Incentive Stock Option under this Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary unless such Incentive Stock Option conforms to
the applicable provisions of Section 422 of the Code.
3.3 Qualification of Incentive Stock Options. No Incentive Stock
Option shall be granted to any person who is not an Employee.
3.4 Granting of Options.
(a) The Committee (or the Board in the case of Options
granted to Independent Directors) shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:
4
<PAGE> 5
(i) Determine which Employees are key Employees
and select from among the Independent Directors, key Employees and
consultants (including Independent Directors, Employees and consultants
who have previously received Options or other awards under this Plan)
such of them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the
number of shares to be subject to such Options granted to the selected
Independent Directors, key Employees and consultants;
(iii) Subject to Section 3.3, determine whether
such Options are to be Incentive Stock Options or Non-Qualified Stock
Options and whether such Options are to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such
Options, consistent with this Plan; provided, however, that the terms
and conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.
(b) Upon the selection of an Independent Director, key
Employee or consultant to be granted an Option, the Committee (or the Board in
the case of Options granted to Independent Directors) shall instruct the
Secretary of the Company to issue the Option and may impose such conditions on
the grant of the Option as it deems appropriate. Without limiting the generality
of the preceding sentence, the Committee (or the Board in the case of Options
granted to Independent Directors) may, in its discretion and on such terms as it
deems appropriate, require as a condition on the grant of an Option to an
Independent Director, Employee or consultant that such Independent Director,
Employee or consultant surrender for cancellation some or all of the unexercised
Options or other rights which have been previously granted to such Independent
Director, Employee or consultant under this Plan or otherwise. An Option, the
grant of which is conditioned upon such surrender, may have an option price
lower (or higher) than the exercise price of such surrendered Option or other
award, may cover the same (or a lesser or greater) number of shares as such
surrendered Option or other award, may contain such other terms as the Committee
(or the Board in the case of Options granted to Independent Directors) deems
appropriate, and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, exercise period or any other term or
condition of such surrendered Option or other award.
(c) Any Incentive Stock Option granted under this Plan
may be modified by the Committee to disqualify such option from treatment as an
"incentive stock option" under Section 422 of the Code.
(d) During the term of the Plan, each person who is an
Independent Director shall be granted an Option to purchase five thousand
(5,000) shares of Common Stock (subject to adjustment as provided in Section
8.3) on the date of each annual meeting of stockholders (other than the 1998
Annual Meeting of Stockholders); provided that such Independent Director is then
serving as a member of the Board and, if applicable, has been reelected to serve
for an additional term as a member of the Board. During the term of the Plan, a
person who is initially elected to the Board after the adoption of the Plan by
the Board and who is an Independent Director at the time of such initial
election automatically shall be granted (i) an Option to purchase twenty
thousand (20,000) shares of Common Stock (subject to adjustment as provided in
Section 8.3) on the date of such initial election and (ii) an Option to purchase
five thousand (5,000) shares of Common Stock (subject to adjustment as provided
in Section 8.3) on the date of each annual meeting of stockholders; provided
that such Independent Director is then serving as a member of the Board and, if
applicable, has been reelected to serve for an additional term as a member of
the Board. Members of the Board who are employees of the Company who
subsequently retire from the Company and remain on the Board will not receive an
initial Option grant pursuant to clause (i) of the preceding sentence, but to
the extent that they are otherwise eligible, will receive, after retirement from
employment with the Company, Options as described in clause (ii) of the
preceding sentence. All the foregoing Option grants authorized by this Section
3.4(d) are subject to stockholder approval of the Plan.
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ARTICLE IV.
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board in the case of Options granted to
Independent Directors) shall determine, consistent with this Plan. Stock Option
Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2 Option Price. The price per share of the shares subject to
each Option shall be set by the Committee (or the Board in the case of Options
granted to Independent Directors); provided, however, that:
(a) Unless otherwise permitted by applicable securities
laws, such price shall be not less than eighty-five percent (85%) of the Fair
Market Value of the stock at the time the option is granted, except that the
price shall be one hundred and ten percent (110%) of the Fair Market Value of
the stock in the case of any person possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or its
Subsidiary;
(b) In the case of Incentive Stock Options and Options
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code, such price shall not be less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock on the date the
Option is granted; and
(c) In the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Subsidiary such price shall not be less than one
hundred and ten percent (110%) of the Fair Market Value of a share of Common
Stock on the date the Option is granted.
4.3 Option Term. The term of an Option shall be set by the
Committee (or the Board in the case of Options granted to Independent Directors)
in its discretion; provided, however, that:
(a) No Option may have a term that extends beyond the
expiration of ten (10) years from the date the Option was granted;
(b) In the case of Incentive Stock Options, the term
shall not be more than ten (10) years from the date the Incentive Stock Option
is granted, or five (5) years from such date if the Incentive Stock Option is
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary;
(c) Except as limited by requirements of Section 422 of
the Code and regulations and rulings thereunder applicable to Incentive Stock
Options, the Committee (or the Board in the case of Options granted to
Independent Directors) may extend the term of any outstanding Option in
connection with any Termination of Directorship, Termination of Employment or
Termination of Consultancy of the Optionee, or amend any other term or condition
of such Option relating to such a termination.
(d) Notwithstanding anything to the contrary contained
in any Stock Option Agreement relating to an Option granted hereunder, unless a
longer period is specified in the Stock Option Agreement or by the Committee
(or the Board with respect to Independent Directors), an Option may be
exercised for a period of three months from the Optionee's Termination of
Employment by reason of his resignation, unless the Option has ceased to be
exercisable for a reason other than such Optionee's Termination of Employment.
4.4 Option Vesting.
(a) The period during which the right to exercise an
Option in whole or in part vests in the Optionee shall be set by the Committee
(or the Board in the case of Options granted to Independent Directors) and the
Committee (or the Board in the case of Options granted to Independent Directors)
may determine that an Option may not be exercised in whole or in part for a
specified period after it is granted; provided, however, that, unless the
Committee otherwise provides in the terms of the Option or otherwise, no Option
shall be exercisable by any Optionee who is then subject to Section 16 of the
Exchange Act
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within the period ending six (6) months and one day after the date the Option is
granted; and provided, further, that Options granted to Independent Directors
shall become exercisable in cumulative annual installments of 25% on each of the
first, second, third, and fourth anniversaries of the date of the Option grant,
without variation or acceleration hereunder except as provided in section 8.3.
At any time after the grant of an Option, the Committee may, in its sole and
absolute discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option (except an Option granted to an
Independent Director) vests.
(b) No portion of an Option which is unexercisable at
Termination of Directorship, Termination of Employment or Termination of
Consultancy shall thereafter become exercisable, except as may be otherwise
provided by the Committee (or the Board in the case of Options granted to
Independent Directors) either in the Stock Option Agreement or by action of the
Committee (or the Board in the case of Options granted to Independent Directors)
following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company and any
Subsidiary) exceeds $100,000, such Options shall be treated as Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth in
the preceding sentence shall be applied by taking Options into account in the
order in which they were granted. For purposes of this Section 4.4(c), the Fair
Market Value of stock shall be determined as of the time the Option with respect
to such stock is granted.
4.5 Consideration. In consideration of the granting of an Option,
the Optionee shall agree, in the written Stock Option Agreement, to remain in
the employ (or to consult for or serve as an Independent Director, as
applicable) of the Company or any Subsidiary for a period of at least one (1)
year (or such shorter period as may be fixed in the Stock Option Agreement or by
action of the Committee (or the Board in the case of Options granted to
Independent Directors) following grant of the Option) after the Option is
granted (or, in the case of an Independent Director, until the next annual
meeting of the stockholders of the Company). Nothing in this Plan or in any
Stock Option Agreement hereunder shall confer upon any Optionee any right to
continue in the employ (or to consult for or serve as an Independent Director,
as applicable) of the Company or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company or any Subsidiary, which are
hereby expressly reserved, to discharge any Optionee at any time for any reason
whatsoever, with or without good cause.
ARTICLE V.
EXERCISE OF OPTIONS
5.1 Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares, and the Committee (or the Board in the case of Options
granted to Independent Directors) may require that, by the terms of the Option,
a partial exercise be with respect to a minimum number of shares.
5.2 Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or such Secretary's office:
(a) A written notice complying with the applicable rules
established by the Committee (or the Board in the case of Options granted to
Independent Directors) stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion;
(b) Such representations and documents as the Committee
(or the Board in the case of Options granted to Independent Directors), in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee (or the Board in the case of
Options granted to Independent Directors) may, in its absolute discretion, also
take whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;
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(c) In the event that the Option shall be exercised
pursuant to Section 8.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option;
and
(d) Full cash payment to the Secretary of the Company for
the shares and for payment of any applicable withholding or other applicable
employment taxes with respect to which the Option, or portion thereof, is
exercised. However, the Committee (or the Board in the case of Options granted
to Independent Directors), may in its discretion (i) allow a delay in payment up
to thirty (30) days from the date the Option, or portion thereof, is exercised;
(ii) allow payment, in whole or in part, through the delivery of shares of
Common Stock owned by the Optionee, duly endorsed for transfer to the Company
with a Fair Market Value on the date of delivery equal to the aggregate exercise
price of the Option or exercised portion thereof; (iii) allow payment, in whole
or in part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee (or the Board in the case of Options
granted to Independent Directors); (vi) allow payment, in whole or in part,
through the delivery of a notice that the Optionee has placed a market sell
order with a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price and any applicable withholding or
other employment taxes; or (vii) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii), (iv), (v) and
(vi). In the case of a promissory note, the Committee (or the Board in the case
of Options granted to Independent Directors) may also prescribe the form of such
note and the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of credit is prohibited by
law.
5.3 Conditions to Issuance of Stock Certificates. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges, if any, on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Committee or the Board shall, in its
absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Committee or the Board shall,
in its absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Committee or the Board may establish from time
to time for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.
5.4 Rights as Stockholders. The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
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ARTICLE VI.
RIGHTS AND RESTRICTIONS WITH RESPECT TO OPTION SHARES
6.1 Ownership and Transfer Restrictions. The Committee (or Board,
in the case of Options granted to Independent Directors), in its absolute
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares. The Committee
may require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two (2) years from the date of granting such Option to such Employee or (ii)
one year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
6.2 Limitation on Exercise of Options Granted to Independent
Directors. No Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of
the Optionee's death;
(b) The expiration of twelve (12) months from the date of
the Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of section 22(e)(3) of the Code);
(c) The expiration of three (3) months from the date of
the Optionee's Termination of Directorship for any reason other than such
Optionee's death or his permanent and total disability, unless the Optionee dies
within said three month period; or
(d) The expiration of ten (10) years from the date the
Option was granted.
ARTICLE VII.
ADMINISTRATION
7.1 Compensation Committee. The Compensation Committee (or another
committee of the Board assuming the functions of the Committee under this Plan)
shall consist solely of two or more Independent Directors appointed by and
holding office at the pleasure of the Board, each of whom is both a
"non-employee director" as defined by Rule 16b-3 and an "outside director" for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.
7.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options are granted or awarded, and to adopt
such rules for the administration, interpretation, and application of this Plan
as are consistent therewith and to interpret, amend or revoke any such rules.
Notwithstanding the foregoing, the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. Any such grant or award
under this Plan need not be the same with respect to each Optionee. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
7.3 Majority Rule; Unanimous Written Consent. The Committee shall
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
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7.4 Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation for their services as
members as may be determined by the Board. All expenses and liabilities which
members of the Committee incur in connection with the administration of this
Plan shall be borne by the Company. The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers, brokers, or other
persons. The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan or Options, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
8.1 Not Transferable. Options under this Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent and distribution or pursuant to a QDRO, unless and until such options
have been exercised, or the shares underlying such Options have been issued, and
all restrictions applicable to such shares have lapsed. No Option or interest or
right therein shall be liable for the debts, contracts or engagements of the
Optionee or the Optionee's successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee, only such Optionee may
exercise an Option (or any portion thereof) granted to such Optionee under the
Plan, unless the Option has been disposed of pursuant to a QDRO. After the death
of the Optionee, any exercisable portion of an Option may, prior to the time
when such portion becomes unexercisable under the Plan or the applicable Stock
Option Agreement or other agreement, be exercised by the Optionee's personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
8.2 Amendment, Suspension or Termination of this Plan. Except as
otherwise provided in this Section 8.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 8.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule. No amendment, suspension or termination of this Plan shall, without the
consent of the holder of Options, alter or impair any rights or obligations
under any Options theretofore granted or awarded, unless the award itself
otherwise expressly so provides. No Options may be granted or awarded during any
period of suspension or after termination of this Plan, and in no event may any
Incentive Stock Option be granted under this Plan after the first to occur of
the following events:
(a) The expiration of ten (10) years from the date the
Plan is adopted by the Board; or
(b) The expiration of ten (10) years from the date the
Plan is approved by the Company's stockholders under Section 8.4.
8.3 Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company and Other Corporate Events.
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(a) Subject to Section 8.3(d), in the event that the
Committee (or the Board in the case of Options granted to Independent Directors)
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company
(including, but not limited to, a Corporate Transaction), or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee's sole discretion (or, in the
case of Options granted to Independent Directors, the Board's sole discretion),
affects the Common Stock such that an adjustment is determined by the Committee
(or the Board in the case of Options granted to Independent Directors) to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, then the Committee (or the Board in the case of Options granted to
Independent Directors) shall, in such manner as it may deem equitable, adjust
any or all of:
(i) the number and kind of shares of Common
Stock (or other securities or property) with respect to which Options may be
granted under the Plan, (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may be
issued and adjustments of the Award Limit),
(ii) the number and kind of shares of Common
Stock (or other securities or property) subject to outstanding Options, and
(iii) the grant or exercise price with respect to
any Option.
(b) Subject to Sections 8.3(b)(vi) and 8.3(d), in the
event of any Corporate Transaction or other transaction or event described in
Section 8.3(a) or any unusual or nonrecurring transactions or events affecting
the Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Committee (or the Board in the case of Options
granted to Independent Directors) in its discretion is hereby authorized to take
any one (1) or more of the following actions whenever the Committee (or the
Board in the case of Options granted to Independent Directors) determines that
such action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any option under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:
(i) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee (or the Board
in the case of Options granted to Independent Directors) may provide, either by
the terms of the agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Optionee's request,
for either the purchase of any such Option for an amount of cash equal to the
amount that could have been attained upon the exercise of such Option, or
realization of the Optionee's rights had such Option been currently exercisable
or payable or fully vested or the replacement of such Option with other rights
or property selected by the Committee (or the Board in the case of Options
granted to Independent Directors) in its sole discretion;
(ii) In its sole and absolute discretion, the
Committee (or the Board in the case of Options granted to Independent Directors)
may provide, either by the terms of such Option or by action taken prior to the
occurrence of such transaction or event that it cannot be exercised after such
event;
(iii) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee (or the Board
in the case of Options granted to Independent Directors) may provide, either by
the terms of such Option or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such Option shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in (i) Section 4.4 or (ii) the
provisions of such Option;
(iv) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee (or the Board
in the case of Options granted to Independent Directors) may provide, either by
the terms of such Option or by action taken prior to the occurrence of such
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transaction or event, that upon such event, such Option be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or shall
be substituted for by similar options covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;
(v) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee (or the Board
in the case of Options granted to Independent Directors) may make adjustments in
the number and type of shares of Common Stock (or other securities or property)
subject to outstanding Options and/or in the terms and conditions of (including
the grant or exercise price), and the criteria included in, outstanding Options
and Options which may be granted in the future;
(vi) In the event the Company undergoes a
Corporate Transaction and the successor or survivor corporation, or a parent or
subsidiary thereof, does assume such Options (or substitutes similar options for
those outstanding under the Plan), then, with respect to each Option held by
persons then performing services as Employees or Directors, the vesting of each
such Option (and, if applicable, the time during which such Option may be
exercised) shall be accelerated and such Option shall become fully vested and
exercisable, if, as a result of the occurrence of the Corporate Transaction, any
of the following events occurs: (1) a Termination of Employment or Termination
of Directorship of an Optionee by the Company or its successor without Cause or
(2) the Employee holding such Option effects a Termination of Employment due to
the fact that there is a material reduction in such Employee's salary (excluding
bonuses (whether or not payable in cash), employee benefits or other non-cash
compensation) without the Employee's express consent; provided that this Section
8.3(b)(vi) shall not apply to a Corporate Transaction involving an exchange of
all of the Common Stock of the Company for capital stock of another company,
whether effected by merger or otherwise (other than the merger contemplated by
the Agreement and Plan of Merger dated as of February 6, 2000 among the Company,
Akamai Technologies, Inc. and Alii Merger Corporation (the "Akamai Merger"), as
to which this proviso shall not apply), if negotiations relating to such
Corporate Transaction commence within six (6) months after Board or Committee
approval of the amendment to the Plan which adds this Section 8.3(b)(vi) to the
Plan; and provided further that, with respect to Options granted to individuals
who become Employees of or consultants to the Company after February 6, 2000,
the Akamai Merger shall not be considered a Corporate Transaction for purposes
of this Section 8.3(b)(vi); and
(vii) None of the foregoing discretionary actions
taken under this Section 8.3(b) shall be permitted with respect to Options
granted to Independent Directors to the extent that such discretion would be
inconsistent with the applicable exemptive conditions of Rule 16b-3. In the
event of a Corporate Transaction, to the extent that the Board does not have the
ability under Rule 16b-3 to take or to refrain from taking the discretionary
actions set forth in Section 8.3(b)(iii) above, each Option granted to an
Independent Director shall be exercisable as to all shares covered thereby
during the five days immediately preceding the consummation of such Corporate
Transaction and subject to such consummation, notwithstanding anything to the
contrary in Section 4.4 or the vesting schedule of such Options. In the event of
a Corporate Transaction, to the extent that the Board does not have the ability
under Rule 16b-3 to take or to refrain from taking the discretionary actions set
forth in Section 8.3(b)(ii) above, no Option granted to an Independent Director
may be exercised following such Corporate Transaction unless such Option is, in
connection with such Corporate Transaction, either assumed by the successor or
survivor corporation (or parent or subsidiary thereof) or replaced with a
comparable right with respect to shares of the capital stock of the successor or
survivor corporation (or parent or subsidiary thereof).
(c) Subject to Section 8.3(d) and 8.8, the Committee (or
the Board in the case of Options granted to Independent Directors) may, in its
discretion, include such further provisions and limitations in any Option as it
may deem equitable and in the best interests of the Company.
(d) With respect to Incentive Stock Options and Options
intended to qualify as performance-based compensation under Section 162(m), no
adjustment or action described in this Section 8.3 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code or would cause such
option to fail to so qualify under Section 162(m), as the case may be, or any
successor provisions thereto. Furthermore, no such adjustment or action shall be
authorized to the extent such adjustment or action would result in short-
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swing profits liability under Section 16 or violate the exemptive conditions of
Rule 16b-3 unless the Committee (or the Board in the case of Options granted to
Independent Directors) determines that the Option is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to any Option
shall always be rounded to the next whole number.
8.4 Approval of Plan by Stockholders. This Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. Options may be granted prior
to such stockholder approval, provided that such Options shall not be
exercisable prior to the time when this Plan is approved by the stockholders,
and provided further that if such approval has not been obtained at the end of
said twelve-month period, all Options previously granted under this Plan shall
thereupon be canceled and become null and void.
8.5 Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Optionee of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting or exercise of any Option. The Committee (or the Board
in the case of Options granted to Independent Directors) may in its discretion
and in satisfaction of the foregoing requirement allow such Optionee to elect to
have the Company withhold shares of Common Stock otherwise issuable under such
Option (or allow the return of shares of Common Stock) having a Fair Market
Value equal to the sums required to be withheld.
8.6 Loans. The Committee may, in its discretion, extend one (1) or
more loans to key Employees in connection with the exercise or receipt of an
Option granted under this Plan. The terms and conditions of any such loan shall
be set by the Committee.
8.7 Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Committee (or the Board in the case of Options granted to Independent Directors)
shall have the right (to the extent consistent with the applicable exemptive
conditions of Rule 16b-3 and to the extent permitted under applicable state law)
to provide, in the terms of Options made under the Plan, or to require the
recipient to agree by separate written instrument, that (i) any proceeds, gains
or other economic benefit actually or constructively received by the recipient
upon any receipt or exercise of an Option, or upon the receipt or resale of any
Common Stock underlying such Option, must be paid to the Company, and (ii) the
Option shall terminate and any unexercised portion of such Option (whether or
not vested) shall be forfeited, if (a) a Termination of Directorship,
Termination of Employment or Termination of Consultancy occurs prior to a
specified date, or within a specified time period following receipt or exercise
of the Option, or (b) the recipient at any time, or during a specified time
period, engages in any activity in competition with the Company, or which is
inimical, contrary or harmful to the interests of the Company, as further
defined by the Committee (or the Board, as applicable).
8.8 Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of this
Plan, this Plan, and any Option granted to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, the Plan and Options granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such applicable exemptive
rule. Furthermore, notwithstanding any other provision of this Plan, any Option
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.
8.9 Effect of Plan Upon Options and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, directors or consultants of the
Company or any Subsidiary or (ii) to grant or assume options or other rights
otherwise than under this Plan in connection with any proper corporate purpose
including but not by way of limitation, the grant or assumption of options in
connection with the
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acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
8.10 Compliance with Laws. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options granted hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
8.11 Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this Plan.
8.12 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
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<PAGE> 1
EXHIBIT 5
HALE AND DORR LLP
COUNSELLORS AT LAW
WWW.HALEDORR.COM
60 STATE STREET * BOSTON, MA 02109
617-526-6000 * FAX 617-526-5000
April 24, 2000
Akamai Technologies, Inc.
500 Technology Square
Cambridge, MA 02139
Re: Third Amended and Restated 1998 Stock Option Plan of INTERVU Inc.
----------------------------------------------------------------
Ladies and Gentlemen:
We have assisted in the preparation of a Registration Statement on Form
S-8 (the "Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
relating to an aggregate of 1,529,461 shares of Common Stock, $.01 par value per
share (the "Shares"), of Akamai Technologies, Inc., a Delaware corporation (the
"Company"), issuable under the Company's Third Amended and Restated 1998 Stock
Option Plan of INTERVU Inc. (the "Plan"). The Plan was assumed pursuant to the
Agreement and Plan of Merger, dated as of February 6, 2000, by and among the
Company, Alii Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of the Company, and INTERVU Inc., a Delaware corporation.
We have examined the Certificate of Incorporation and By-Laws of the
Company, each as amended and restated to date and originals, or copies certified
to our satisfaction, of all pertinent records of the meetings of the directors
and stockholders of the Company, the Registration Statement and such other
documents relating to the Company as we have deemed material for the purposes of
this opinion.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares in accordance with the Plan, to register and qualify the
Shares for sale under all applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the Commonwealth of Massachusetts, the
Delaware General Corporation Law statute and the federal laws of the United
States of America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized for issuance and, when the Shares are issued
and paid for in accordance with the terms and conditions of the Plan, the Shares
will be validly issued, fully paid and nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
<PAGE> 2
Akamai Technologies, Inc.
April 24, 2000
Page 2
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act. In giving such
consent, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Hale and Dorr LLP
HALE AND DORR LLP
<PAGE> 1
EXHIBIT 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our reports dated January 25, 2000, except
for Note 14, as to which the date is February 28, 2000, relating to the
consolidated financial statements and financial statement schedule, which appear
in the Annual Report on Form 10-K of Akamai Technologies, Inc. for the year
ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
April 24, 2000
